Cheaper Internet-ready phones may make India Facebook's biggest market after US

MUMBAI: In a two-room shanty with no running water in northern Mumbai, Darshana Verma makes tea on a small stove. On a bench nearby, her 18-year-old son, Vishal, messages Facebook friends on the keypad of his Nokia smartphone.

"This is the Internet age," said the 36-year-old domestic helper, who spent more than half her $300 monthly income on Samsung and Nokia Oyj mobile phones for her children. "Facebook is there, all these things happen there now — they make friends, maybe they can even find jobs there."

Cheaper Internet-ready phones may make India Facebook Inc.'s biggest market after the U.S. next year with more than 50 million users, according to Nielsen Co. As Google Inc.'s rival social network also gains in popularity, companies including Pepsi Co. are boosting Internet advertising to reach the 352 million children under age 15 who are coming online.

"There's a mob out there," said Tarun Abhichandani, group business director at IMRB International, part of WPP Group, the world's biggest ad agency. "India has a young demographic, and it's social networking that brings them online."

The number of active accounts in India jumped 85% to 32 million this year, according to socialbakers.com, which tracks user data at the Palo Alto, California-based company.

That's the world's third-biggest behind the 153 million in the US and 39.2 million in Indonesia. Mobile handset sales in the world's second-fastest growing major economy will surpass 206 million units annually in 2014 from 175.9 million last year, says Gartner.

LIKING MTV

Pepsi and Viacom Inc.'s MTV have been quick to tap the popularity of Facebook in the South Asian nation through promotions and contests.

Their Indian pages have garnered 1.4 million and 2.9 million "likes," respectively. "Indians want brands to communicate with them using social media," said a Nielsen report, adding that 60 percent of Indian social-media users are "open" to being approached by brands.

Online advertising in India rose 26% to $223 million in the year ended March, according to IMRB. Advertising on social networking sites grew 65% from the year before.

"The shift to online advertising is just starting to happen," Abhichandani said. "The number of Internet users here is on the rise and is going to keep rising for some time. Advertisers are realizing that."

Facebook opened an office in Hyderabad in southern India in September to serve users, advertisers and developers in the country and around the world, spokeswoman Kumiko Hidaka wrote in an e-mail.

The company is trying to improve service by working with mobile partners and "building relationships with India's strong network of developers and entrepreneurs," she said.

CHINA BLOCK

Facebook is blocked in China, the world's most-populous nation. The social-networking company has held talks with potential partners about how to gain a foothold, a person familiar with the matter told Bloomberg in April.

"Facebook has chosen to focus on open markets, rather than markets like China where there's censorship and control," said Foong King Yew, vice president of research at Gartner in Singapore. "India's the biggest of those. It's rapidly growing. It's an untapped market." A mobile phone allows 22-year-old student Rachel Thomas to log on when she's at school.

BOLLYWOOD TWEETS

Twitter is also gaining, helped by users like Bollywood star Shah Rukh Khan, business tycoon Anand Mahindra and former minister Shashi Tharoor.

Tata Consultancy Services, India's largest software exporter, posts its earnings in 140-character messages on the micro-blogging website. LinkedIn has 10 million members in India, its second- largest market after the US.